Dongfeng Motor : CLARIFICTION ANNOUNCEMENT

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DONGFENG MOTOR GROUP COMPANY LIMITED*

東風汽車集團股份有限公司

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 489)

CLARIFICTION ANNOUNCEMENT

Reference was made to the announcement of the Company dated 30 December 2019 (the "CCT Announcement") in relation to the continuing connected transactions which, among others, includes the Master Land Lease Agreement. Unless otherwise defined herein, capitalised terms used in this announcement shall have the same meanings as those defined in the CCT Announcement.

Given that the IFRS 16 "Lease" ("IFRS 16") takes effect from 1 January 2019, the Company Group as the lessee shall recognise a lease as a right-of-use asset and a lease liability, pursuant to which the Company Group measure the right-of-use asset at its carrying amount as if the IFRS 16 had been applied since the commencement date (discounted using the lessee's incremental borrowing rate at the date of initial application) or an amount equal to the lease liability adjusted by the amount of any prepaid lease payment. Correspondingly, the Company Group is required to set annual caps on the total value of right-of-use assets relating to leases to be entered into by the Company Group as a lessee in each year under the Master Land Lease Agreement. The sub-section named "The Proposal Annual Caps" under the section named "5. Master Land Lease Agreement" on page 13 and 14 of the CCT Announcement is revised as below, and the rest of the CCT Announcement remains the same with no change.

"The Proposed Annual Caps

Historical Transaction Amounts

The historical cumulative rental amounts in relation to lease of land to the Company Group by DFM and its subsidiaries are as follows:

Historical Transaction Amounts (RMB million)

For the year ended 31	For the year ended 31	For the ten months ended
December 2017	December 2018	31 October 2019
(unaudited)	(unaudited)	(unaudited)
	1

125

136

91(Note)

Note: Some of the rental payments are due on an annual basis and the others due on a semi- annual basis. The historical transaction amounts for the nine months ended 31 October 2019 only reflect the rental payments due on a semi-annual basis.

The proposed annual rental amounts for the transactions contemplated under the Master Land Lease Agreement for each of the financial years ending 31 December 2020, 31 December 2021 and 31 December 2022 respectively are as follows:

	For the financial year ending 31 December
	2020	2021	2022
RMB million	230	230	230
(approximately HKD million)	256.37	256.37	256.37

The proposed annual rental amounts are determined based on the maximum annual amounts payable by the Company Group under the Master Land Lease Agreement and historical levels and expected adjustments of the rental payments of comparable land parcels.

The proposed Annual Caps based on the value of right-of-use assets relating to the Land under the Master Land Lease Agreement for each of the financial years ending 31 December 2020, 31 December 2021 and 31 December 2022 respectively are as follows:

	For the financial year ending 31 December
	2020	2021	2022
RMB million	2,500	500	500
(approximately HKD million)	2,786.63	557.33	557.33

The proposed Annual Caps are determined based on (i) the annual rental amount payable by the Company Group to DFM and its subsidiaries, and (ii) the estimated demand of the Company Group for the new leases of land from DFM and its subsidiaries in each of the financial years ending 31 December 2020, 31 December 2021 and 31 December 2022 respectively."

By order of the Board of Directors

ZHU YANFENG

Chairman

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Wuhan, the PRC, 3 January 2020

As at the date of this announcement, Mr. Zhu Yanfeng, Mr. Li Shaozhu and Mr. You Zheng are the executive directors of the Company, Mr. Cheng Daoran is the non-executive director of the Company and Mr. Ma Zhigeng, Mr. Zhang Xiaotie and Mr. Chen Yunfei are the independent non-executive directors of the Company.

* For identification purposes only

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